Japanese car making giant Nissan is set to slash its production by 20 per cent and will close down a factory in Spain which are part of some of the most sweeping strategy restructuring of the company even as it announced its first annual operating loss this year since more than a decade.

For its fiscal year ended in March, the Japanese auto maker reported an operating loss of 40.5 billion yen ($376 million). Last year the company had announced an operating profit of 318 billion yen ($2.9 billion). This is also the worst performance of the company since 2009 when the global financial crisis was at its peak.

Analysts believe that the company could take more stern measures. Considering the global uncertainties induced because of the novel coronavirus pandemic, “it is difficult to reasonably forecast an outlook for fiscal year 2020 at this time,” said Nissan’s CEO Makoto Uchida at an earnings presentation on Thursday.

Just a day ago, Nissan, Renault and Mitsubishi announced their intentions to further collaborate and deepen their alliance. The companies announced that their focus now will be on a reduced number of models while sharing production facilities and leveraging the current geographic and technological strengths of each of the three members of the alliance. All of these are aimed at reducing costs of operations and to weather the coronavirus pandemic storm.

The previous strategy of ‘growth at all costs’ that was instituted by former boss Carlos Ghosn would also be abandoned by the three companies, said the world’s biggest car making alliance. Ghosn, the former boss-turned-fugitive, was arrested in November of 2018 in Tokyo over charges of financial misconduct. The charges have been refuted by Ghosn.

The announcement of the new strategic imperatives by Nissan pushed its shares up in Tokyo for a total growth of 29 per cent so far this year.

The new strategy of cost cutting will help the company to the make annual savings of about 300 billion yen ($2.8 billion), Nissan said. It said that the number of models that it will be manufacturing will be reduced to 55 from the current 69 models that it makes. The company will also exit the South Korean market and shut down its vehicle manufacturing plant in Barcelona.

While saying that the decision of Nissan was regretful, the Spanish government said it will try ot convince the company to retain the factory, said the country’s Industry Ministry in a press release.

The company also plans to make Thailand its single production base in Southeast Asia with its car manufacturing plant in the country. The company had already shut down its manufacturing factory in Indonesia earlier this year.

Even before the novel coronavirus pandemic hit the world and the auto market, Nissan was already suffering from dropping sales and profit pressures. Last year the company had said that a total of 12,500 jobs would be cut by it globally.

While denying to reveal whether the company would be cutting down more jobs as a part of its new strategy, Uchida on Thursday said that consultation with unions and other stakeholders still remains to be conducted before a decision can be taken.

(Adapted from CNN.com)